My guest today is Tim Ruse, CEO of Zero Latency VR. This episode was recorded on June 22nd, 2016.

Tim and I talk about how out-of-home VR is different from culture to culture, about whether vendors need to be vertically integrated – e.g. develop most items themselves, about how gamers react to out-of-home VR in a different way than non-gamers, and many additional topics.

Tim: Free-roam virtual reality, as opposed to what you can get in your home, free-roam virtual reality is focusing on warehouse scale, so large scale installations. Everything from the tracking system to the wearable technology that allows you to have a completely wireless experience. The focus is heavily on multi-player, so we’re allowing it to be a social experience. Giving you something that you’re never going to be able to get at home which is large spaces. The sensation of moving around in VR, having that physically moving, having that mapped to what you’re seeing inside the goggles and also with the sound, we believe, gives you one of the highest senses of immersion you can get with the available technology today.

VRguy: I saw that you announced a couple weeks ago that your first customer is SEGA in Japan. Congratulations, I’m glad that we can be helping with that a little bit. You are probably speaking with other prospects or customers worldwide, not just in Japan. Are you finding a difference between what a Japan customer or China customer or Europe customer or US customer wants?

Tim: Yes we are. I think a lot of it comes down to, because it’s a free-roam product and it involves physical real estate. A lot of it comes down to the availability of the real estate and also the recreational habits of the local population. The Americans, for example, have a very different recreational culture to the Europeans or the Australians. The same with the Japanese and the Chinese. We’re definitely finding that the concept is similar. What we’re finding more and more certainly in the last 6 to 9 months there’s been growing interest in out-of-home virtual reality entertainment. Huge amount of interest in China, but growing interest in America and Europe as well. The common theme is people want to find a premium experience you can’t get at home and the same excitement in the VR space, but they’re also seeing the limitations of in-home setups, limited mobility, high barrier to entry, limited content. They’re realizing that they can provide a better experience out of home to attract people.

What we’re finding in China, for example, where a lot of it is mall based. There’s a big mall culture in China in the heavily, very urban cities. They want to be putting something in malls where in America we’re getting some malls, but a lot of people who are running other similar entertainment attractions that want to put in virtual reality spin on those. Whereas, you know, in China, there’s a big concept of VR parks being completely virtual, and the same in Korea, completely virtual attraction, or series of attractions, it is definitely very, very popular there.

VRguy: In the US are you finding that people want to just open a completely new facility for virtual reality or is it more about adding a new attraction to a place where people already come to have a social gaming experience?

Tim: We’re definitely getting interest from both. A growing number of people who already have facilities, or are looking to put together new facilities and sort of become part of an anchor attraction, or another attraction. There’s certainly a feeling, you know, targeting millennials, so the e-sports merging with virtual reality, merging with premium destination experience. Where you can go and be social, you can have dinner, you can have a drink, you can participate in an activity. It’s something that’s growing in the American out of home sector, certainly in the, yeah, try to target these things to a millennial audience and there’s growing interest, I think, in merging those ideas with virtual ideas which is very exciting. Certainly looking at bigger installations, like real estate in some areas would be cheaper than going for bigger destination centers, which is a really interesting idea for us.

VRguy: Now you’ve been running your Melbourne location for quite some time, I think last time I checked with you guys, you said you were approaching about 10,000 people who already experienced this?

Tim: Yes.

VRguy: Some of these people have seen some VR or a lot of VR and I would guess that some of them have never put on a VR headset before. Do you see a difference in their reactions or in the way they think about your experience?

Tim: Absolutely. I think initially when we opened, the initial burst was sold out, almost half our tickets in under a month from August to December. Initially there was a lot of people who like virtual reality, people who are very into the modern gaming experience, and that made up the majority of what we were doing. More and more that shifted to just word of mouth, and what we’re finding is people were more, and more coming from all walks of life, they just wanted this cool new thing and they want to try it out.

I actually think, which is interesting I thought, quite interesting observation, is that people who are traditional gamers, like first person shooter games, console games, PC games, they come, and they’re actually almost harder on the experience because they’re expecting certain things. Like they want a camera, they want a health bar, they want things that we can’t provide in free-roam VR because we’re going for a really immersive simulation style feel. They find they’re missing. Whereas if you’re coming from a non-gaming background, and we get this segment in the market that are sort of in their mid to late 30s and the last time they played video games was Golden Eye at home or at the University. They are almost more receptive to it than gamers, because they haven’t played a modern video game. Your graphics are pretty cool, they haven’t played an immersive experience like this before, period, let alone a modern video game. They’re almost more amazed, I think, because they’ve missed a generation. They’ve missed the PlayStation3 and 4, they haven’t played that.

I think that’s a really interesting observation and I think they actually enjoy it more than the traditional gamers that think it’s just going to be like Call of Duty when it’s actually a different thing.

VRguy: You built your own tracking system, right?

Tim: Yes.

VRguy: Why did you need to do that?

Tim: We found that given the cost of getting the alternative tracking solutions and some of the technical limitations in terms of just getting people in and out of the system availability, we thought it would be wise to invest in our own tracking system. Be wise to invest in our own tracking technology. That’s certainly been a really good move for us. When other people are struggling to put 2 or 3 players in a space, we’re now moving up to testing with 12, getting success with that. The decisions we made around that was about easy onboarding of people, easy load in and load out. All those operational requirements that some people don’t think about until they kind of go, “Hang on, how are we going to scout it out, make it comfortable?” We’ve always approached it with going okay, we need a certain amount of people per square foot to make this a profitable enterprise, and we’ve always focused on that. Having our core tracking IP focused on easy load in, easy load out, high player density, zero calibration in order to get players into the system. That was the key focus on us developing our own tracking software.

VRguy: I think it’s typical for early stage markets that players end up being vertically integrated. That they do, in your case, the weapon, the tracking system, the content, we work together on the HMD and so on.

Tim: Absolutely.

VRguy: Thinking ahead, do you see Zero Latency continuing to do all these things or do you think that ultimately your core competency or IP if you may, lies in just a particular area or a couple of particular areas?

Tim: It’s an interesting question, we definitely, like right now we’ll always be broadly looking at alternatives and we don’t make a lot of stuff ourselves. We initially started making our own backpacks from scratch including getting things off the shelf and putting it together. We rapidly, we had problems with that so we moved to collaborating with Alienware and using their Alpha platform and going forward with other things with them as well.

I think certain things will start to come and be more freely available, and we may sort of change, but our ambition as a company is to make immersive experiences that are the best on earth. It’s a grandiose mission but that’s what we’re trying to do at the moment. That involves a certain amount of hardware we need to build ourselves. I think we’ll always need to build some of it ourselves, and a lot of that is around quality control and reliability. We found, for example, the DK2s and the development kits that the failure rate was actually quite high, in those DK2s, because when you’re running them hard and using them during testing, they don’t last as long as you’d like. We want to make sure when you’re putting something into a commercial environment, you’re putting your brand on it, it’s got to be a really strong product.

It’s going to be a balancing act between obviously you’ve got to sink a lot of R&D into making your own technology, but it certainly allows you to control that experience going forwards.

VRguy: Now you started with essentially a first person shooter game.

Tim: Yes.

VRguy: Shooting zombies. Do you see a need, or do you have in your plans other types of experiences?

Tim: Absolutely, we’re in the process of finalizing three other experiences and we’re going for one that’s more orientated towards just around being in an amazing, beautiful, and visually very lush environment. One that is set in outer space, and it’s more it’s a shooter, but the focus is more on exploration and movement, and then another one which is more what we’ve done in the past, which is a really intense zombie shooter with a view to put these out in the marketplace and see what resonates with people. We know who likes shooting zombies, and from I guess a social standpoint, it’s an apolitical no-brainer, it’s a fun shooting game, there’s no gotcha there. You’re not taking sides in any geo-political conflicts like Call of Duty is, you’re just shooting zombies, it’s a straight-up shooter.

We fundamentally believe that we’re only scratching the surface of what VR is capable of, and certainly what a free roam platform is capable of. We are focusing heavily right now and have been for the last six months and for the next indefinitely really pushing the boundaries of what is possible with the thesis what can you do in free-roam VR that you can’t do in real life? That is the question we’re trying to answer at the moment. Building content around that to try to take people out of that sort of, “Oh it’s a simulation engine.” No, it’s a completely different world that we’re transporting you into.

VRguy: The concept of free-roam VR maybe wasn’t called that way, but it has been around for quite some time. I’ve seen many military trainers where people walk around with a computer on their backpack, with HMDs in their collaborative space, learning how to clear a building or to do something else. I believe that there are quite a few similarities between the high end military training and some of the things that are required for out of home VR. Do you share that view?

VRguy: One last question that I know I want to ask. When I tried your experience, 1 of the things that I liked about it is that it’s not just about VR, any more than coming to a restaurant is about the food. You come to a restaurant to eat food, but you also want to do other things, whether it’s the ambiance, or the service, or the presentation, or the friends or whatever else is going on there. I felt that way about your experience, my question is that on purpose or just happened this way?

Tim: No, it’s been intentionally designed. We found the social aspect is really powerful, and even, not even, but a lot of times we have mixed groups of six people so there will be a 2, and a 2, and a 2, or a 3 and a 3. Sometimes you’ll get a single player in the mix, and seeing those groups come in in this exciting, kind of galvanizing experience I think shows the power of putting people physically together but in this really immersive experience, allows people from different walks of life to really come together. It’s going to be really interesting to see that evolve over time as we start to change the content away from just that low-hanging fruit of straight up shooters, and putting people into other situations together. I think that social aspect is very powerful.

Especially in gaming, it’s very different if I’m sitting at my computer and I’m playing an online game I can hear you in my headset. It’s very different for me to be talking to you in a space, pulling down a visor or pulling down my goggles and seeing you represented as an avatar and I know you’re physically there. The neuroscience of it still obviously needs to be researched, but I think there’s something very powerful about being in a virtual world but physically together. There’s certainly something about it that seems to transport people into a different head space which is really powerful. Fascinating, and quite interesting to watch I think.

VRguy: As we come to a close, where could people learn more about what you do and get in touch with you?

Tim: If you try to get in contact with us, just go to our website www.zerolatencyvr.com. If you go to our contact us page or go to our Facebook page, Google zero latency AU, it comes up. That’s the best way to contact us. We’re pretty active on our Facebook page and pretty active on our email, so you’ll definitely hear back from us.

VRguy: Excellent, well Tim thank you again for joining me today and best of luck with your venture.